Management 11e John Schermerhorn Chapter 4 Environment, Sustainability and Innovation

Planning Ahead — Chapter 4 Study Questions What is the external environment of organizations? What are key issues in organization-environment relationships? What are the emerging challenges of sustainability and the environment? How do organizations accomplish innovation?

Study Question 1: What is the external environment of organizations? The general or macroenvironment — all of the background conditions in the external environment of the organization including: Economic health of the economy Legal-political norms, customs, social values Socio-cultural philosophy/objectives of political party running the government Technological development and availability of technology Natural environment nature and conditions of environment

Figure 4.1 Starbucks general environment

Study Question 1: What is the external environment of organizations? The specific (task) environment - actual organizations, groups, and persons with whom an organization interacts and conducts business Includes important stakeholders such as: Customers Suppliers Competitors Regulators Owners

Customer relationship management Study Question 2: What are key issues in organization-environment relationships? Customer relationship management establishes and maintains high standards of customer service in order to strategically build lasting relationships with and add value to customers Supply chain management strategic management of all operations relating to an organization’s resource suppliers

Figure 4.2 Multiple stakeholders in the environment of an organization

Competitive advantage Study Question 2: What are key issues in organization-environment relationships? Competitive advantage a core competency that clearly sets an organization apart from competitors and gives it an advantage over them in the marketplace

Companies may achieve competitive advantage in many ways, including: Study Question 2: What are key issues in organization-environment relationships? Companies may achieve competitive advantage in many ways, including: Products Pricing Customer service Cost efficiency Quality Knowledge

Customers want: High quality Low price On-time delivery Great service Study Question 2: What are key issues in organization-environment relationships? Customers want: High quality Low price On-time delivery Great service

Key customer service lessons: Study Question 2: What are key issues in organization-environment relationships? Key customer service lessons: Protect reputation for quality products Treat customers right

Environmental uncertainty Study Question 2: What are key issues in organization-environment relationships? Environmental uncertainty a lack of complete information regarding what exists and what developments may occur in the external environment Two dimensions of environmental uncertainty: Degree of complexity Rate of change

Figure 4.3 Dimensions of uncertainty

Organizational Effectiveness Study Question 2: What are key issues in organization-environment relationships? Organizational Effectiveness sustainable high performance in using resources to accomplish mission and objectives Systems resource approach focuses on resource acquisition Internal process approach focuses on operations efficiency Goal approach focuses on accomplishing key objectives Strategic Constituencies focuses on stakeholder impact

Sustainable development Study Question 3: What are the emerging challenges of sustainability and the environment? Sustainable development makes use of environmental resources to support societal needs today while also preserving and protecting them for future generations

Three P’s of organizational performance Study Question 3: What are the emerging challenges of sustainability and the environment? Three P’s of organizational performance Profit People Planet

Study Question 3: What are the emerging challenges of sustainability and the environment? Environmental capital – natural resources used to sustain life and produce goods and services for society Land Water Minerals

Study Question 3: What are the emerging challenges of sustainability and the environment? Green management – managing people and organizations in ways that preserve the natural environment Reducing energy consumption Minimizing environmental impact

Study Question 3: What are the emerging challenges of sustainability and the environment? Human sustainability – concern for the effect of management practices on employee physical and psychological well-being Health and wellness programs Stress management Minimizing work-family conflict Control over work Fair wages and opportunities

Study Question 4: How do organizations accomplish innovation? Innovation - process of putting new ideas into practice Business innovations Product innovation Process innovation Business model innovation

Study Question 4: How do organizations accomplish innovation? Sustainable innovations – reduce carbon footprints and environmental impacts of organizations, their practices and products

Study Question 4: How do organizations accomplish innovation? Social business innovations – find ways to use business models to address important social problems

Study Question 4: How do organizations accomplish innovation? The innovation process Step 1 Imagining Step 2 Designing Step 3 Experimenting Step 4 Assessing Reverse innovation – innovation can come from any level in the organization or location

Study Question 4: How do organizations accomplish innovation? Commercializing Innovation - turning new ideas into products services or processes to increase profits through Greater sales Reduced costs 3M’s process to develop Post-It Notes is a good example

Study Question 4: How do organizations accomplish innovation? Idea creation Initial experimentation Feasibility determination Final application External environment and market sensitivity Example of commercializing innovation process Internal organizational sensitivity

Study Question 4: How do organizations accomplish innovation? Characteristics of innovative organizations Strategy and culture Structures Systems Staffing and management

Global Green USA: Greener cities for a cooler planet Chapter 4 Case Global Green USA: Greener cities for a cooler planet

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